Recently, the news of a “lost” prototype of the new Apple iPhone graced the covers of many prominent news publications (for example, CNN) . Could this be the design for the next model that most think will be revealed next month? Notice, the reports said, the new case design, the forward facing camera and the improved display. Apple must be dismayed that the revealed information. How would this information affect Apple’s competitors? Would not the early disclosure help them? Perhaps these competitors could alter their marketing messages, revamp their own products and initiate counter-measures in May (rather than after the official announcement).

A casual perusal of many websites such as Gizmondo and Engadget highlights many similar leaks. These sites routinely report pre-launch information about new products. Sometimes the information sources are clear. In many cases, the sources are unnamed. Sometimes the information is detailed. Often, the details are sketchy.

How should competitive intelligence people deal with leaks?

Here are five important principles and cautions.

All organizations (especially public ones) leak information. Most of the time, they try to control or hide the leaks. This makes it harder for outsiders to draw definitive conclusions. Nevertheless, the interpretation of leaks is the bread-and-butter of a competitive intelligence person’s role. For instance, look for mandated leaks (e.g., financial reports), social leaks (e.g., social media activity of employees) and nuanced leaks (e.g., executive calls with analysts) to discover clues about a company’s strategy and direction.

Not all leaks are equal. In sports, it is very valuable to know your opponents plays. If you knew their plays a month in advance of the competition, you would orient your defense to thwart their specific goals. On the other hand, knowing a play moments before it occurs is less valuable. Timing is only one factor that determines the value of a leak. Other factors include the relevance of the leak to your plans, the degree to which the leak reflects board strategy and your ability to translate the knowledge of the leak into useful action.

Most leaked information is not surprising. This is true especially when a competitive intelligence person is already tracking the competitor. Take the Apple example, should any competitor be surprised with the recent revelations. No, because Apple is continuing a pattern established three years ago in their smartphone product and they are responding to easily discerned competitive pressures (i.e., need for better display, forward facing camera, faster processor). That is why most leaks should be confirmatory rather than revelatory for a prepared competitive intelligence professional.

Leaks are not always leaks. This point is less of a principle and more of a caution. A skeptical competitive intelligence person should always ask how and why the leaked information became available. There are multiple reasons for these questions. One, competitors can use leaks for distractions. You are looking one way while their main thrust is actually from another direction. Two, companies (and politicians) leak information to test concepts. Your response (if it is obvious) gives them information that you may not want them to have. Three, sometimes the leak is designed to drive interest (could Apple be doing this?) in something new. It is prudent to understand the possibilities to avoid over reactions or misinterpretations.

Counting on unusual leaks is a trap. It is spectacular when a bombshell leak concerning a competitor leads to a great competitive advantage for a company. That situation is akin to breaking the enemy’s secret codes in wartime and using the information to win a great battle. Sometimes it happens. Usually, it does not. The fundamental approaches to effective competitive intelligence are not spectacular, sexy or splashy. Instead, they are rooted in solid analytical models and techniques, effective primary research and trusted relationships with decision-makers.

The recent Apple iPhone revelations are a good lead story for Apple fans or casual business followers. However, they are not very useful for competitive intelligence purposes. The core value from competitive intelligence comes from less glamorous detailed work rooted in strong CI fundamentals.

Do you agree? How have you dealt with leaks?

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